By 
Demand and supply imbalance continued to characterize the Zambian markets in Monday’s trading session as sustained greenback appetite saw the Kwacha end the day on the back foot.
On February 13,2023, Bank of Zambia (BoZ) adjusted the minimum statutory ratio on both local and foriegn currency deposit to address Kwacha volatility.
This was also applied to government deposits and Vostro account deposits which increased by 2.5 percentage points to 11.5 percent from nine percent.
According to BoZ Deputy governor Francis Chipimo, the measure was aimed at addressing the increased volatility in the exchange rate which intensified in December 2022 and has persisted in 2023.
He said this would safeguard stability of the foreign exchange market.
According to Absa Market update, the Kwacha opened the day on Monday at K19.450/19.500 per dollar, which showed signs of weakness.
Read more : Bank of Zambia moves to prevent further fall in Kwacha value, as poor run persists
It stated that the Kwacha was down five ngwee by mid-day to trade at K19.500/19.550 on the bid and offer respectively, where it also closed off.
With large corporate demand surging and supply still low, we are likely to see the Kwacha add on to its loses in the near term.
On the money market, the report stated that the volumes of funds traded on the interbank in Friday’s session was up at K925.00 million from K708.00 million.
It indicated that the weighted overnight interbank rate was equally up at 9.34 percent from 9.20 percent.
“The liquidity levels in the market decreased to K887.45 million from the K1,593.52 million seen in the previous session,” it stated.
WARNING! All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express permission from ZAMBIA MONITOR.
Comments